Medicaid Cuts Threaten Healthcare Access

Healthcare providers nationwide are feeling the intense pressure following the enactment of President Trump’s wide-ranging tax and spending legislation, sometimes referred to as the One Big Beautiful Bill Act. Although Republicans insisted the Medicaid cuts, which are expected to reduce federal spending by about $900 billion over a decade, were aimed at reducing fraud and getting adult beneficiaries to work, the fallout includes fewer services and doctors available for sick children and low-income adults.

The legislation, which is projected to cause 7.5 million Americans to lose Medicaid coverage by 2034, is acting as a "long-term headwind" for healthcare systems. The cuts are proving to be the "death knell" for hospitals that were already financially struggling.

Children’s hospitals are especially vulnerable, as they rely on Medicaid for about half of their revenue, a much higher proportion than general acute-care hospitals. They collectively stand to lose billions in revenue due to the law.

A major concern is the capping of state-directed payments, which are supplemental funds that help offset Medicaid’s typically low reimbursement rates. These funds are crucial for supporting services like increasing mental health staffing and screening children for abuse and trauma. Phoenix Children's Hospital, for instance, expects to lose approximately $172 million a year from these supplemental payments alone. If these payments are cut, hospital officials warn they may be forced to reduce staff and services, putting treatments that require longer admissions or bring in less revenue "in the crosshairs".

The impact extends far beyond specialized pediatric care. Rural hospitals and obstetric wards are disproportionately affected, with more than 300 rural hospitals at risk of closure or service reduction.Across the country, facilities are shuttering or scaling back services:

• Georgia: St Mary’s Sacred Heart hospital in Lavonia closed its obstetric ward, citing the Medicaid cuts as the factor that "solidified" the decision.

• Kansas: Freeman Health System scrapped plans to open a hospital in a rural area, citing the "unpredictable impact" of the new legislation.

• Maine: Maine Family Planning, which relied on about $2 million in annual Medicaid reimbursements, stopped offering primary care services due to provisions blocking larger abortion providers from receiving funds. This action eliminated jobs for dedicated primary care staff.

• Nebraska/New York/Virginia/Oregon: Other closures include the only health clinic in Curtis, Nebraska, due to financial difficulties and "anticipated federal budget cuts"; Kaleida Health shutting down therapy and family planning clinics in New York; Augusta medical group closing three primary care clinics in Virginia; and Providence Seaside Hospital shutting its obstetric ward in Oregon.

• Washington: Seattle Children’s hospital is planning to lay off over 150 staffers and eliminate another 350 open roles.

Hospital systems like Phoenix Children’s are hoping Congress reverses or delays the funding cuts, but they are already preparing to "close the funding gap" in anticipation of significant challenges. The loss of these funds curtails expansions of care and workforce growth.

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Hospitals and clinics are shutting down due to Trump’s healthcare cuts. Here’s where

Trump's Medicaid cuts will hit some children's hospitals

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Keywords: Medicaid Cuts

Medicaid Cuts

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